Question 1 – CVP Analysis
Brandon Manufacturing provides the data below relating to its single product for 2020:
Required:
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In: Accounting
(b)Raymond Traders is a small business, and it undertakes periodical stock-takes to determine its inventory value. On 30 June 2020, Raymond Traders completed a physical stock-take, and inventory on hand as at 30 June 2020 had a cost of $39,600. However, some of the inventory items were deemed to be obsolete and Net Realisable value was determined to be $36,000.
(i) Based on the information above, what inventory management system is Raymond Traders currently using? Outline one advantage and one disadvantage of the inventory management system.
(ii)Advice Raymond Traders on the value of inventories to be shown in the Statement of Financial Position as at 30 June 2020, with reference to NZ IAS 2. Explain. (iii)In light of your answer (ii) above, prepare a journal entry to record any required adjustments on 30 June 2020.
(c) NZ IAS 2, paragraph 36 requires companies to make disclosures to present inventory fairly in their financial statements. List six disclosures that companies must include in the financial statements as additional disclosures.
In: Accounting
Bridgeport Corp. sponsors a defined benefit pension plan for its
employees. On January 1, 2020, the following balances related to
this plan.
| Plan assets (market-related value) | $536,000 | ||
| Projected benefit obligation | 652,000 | ||
| Pension asset/liability | 116,000 | Cr. | |
| Prior service cost | 86,000 | ||
| Net gain or loss (debit) | 99,000 |
As a result of the operation of the plan during 2020, the actuary
provided the following additional data for 2020.
| Service cost | $124,000 | ||
| Settlement rate, 9%; expected return rate, 10% | |||
| Actual return on plan assets | 49,000 | ||
| Amortization of prior service cost | 26,000 | ||
| Contributions | 144,000 | ||
| Benefits paid retirees | 88,000 | ||
| Average remaining service life of active employees | 10 | years |
1.Using the preceding data, compute pension expense for Bridgeport
Corp. for the year 2020 by preparing a pension worksheet that shows
the journal entry for pension expense. (Enter all
amounts as positive.)
2. Use the market-related asset value
to compute the expected return and for corridor
amortization.
| Expected return |
$ |
|
| Corridor amortization |
$ |
In: Accounting
Cheyenne Corp.’s income statement for the year ended December 31, 2020, had the following condensed information:
| Service revenue | $773,600 | |||
| Operating expenses (excluding depreciation) | $497,000 | |||
| Depreciation expense | 57,000 | |||
| Unrealized loss on FV-NI investments | 4,500 | |||
| Loss on sale of equipment | 12,100 | 570,600 | ||
| Income before income taxes | 203,000 | |||
| Income tax expense | 52,000 | |||
| Net income | $151,000 |
There were no purchases or sales of trading (FV-NI) investments
during 2020.
Cheyenne’s statement of financial position included the following
comparative data at December 31:
| 2020 | 2019 | |||
|---|---|---|---|---|
|
FV-NI investments |
$21,700 | $26,200 | ||
|
Accounts receivable |
35,100 | 54,900 | ||
|
Accounts payable |
45,400 | 31,500 | ||
|
Income tax payable |
6,900 | 9,200 |
Assume that Cheyenne Corp.’s current cash debt coverage ratio in 2019 was 4.5. Calculate the company’s current cash debt coverage ratio in 2020. (Round answer to 1 decimal places, e.g. 7.5.)
| Cash Debt Coverage Ratio times (rounded to 1 decimal place) |
In: Accounting
The following information is available for Bob and Brenda Horton, a married couple filing a joint return for 2020. Bob is 61 and Brenda is 60. They have fully supported their son, Charles age 31 (a US citizen) who lived with Bob and Brenda all of 2020. Bob and Brenda fully supported Charles for all of 2020. Charles only source of income was $3,990 from unemployment.
The following information relates to Bob and Brenda for 2020:
Salary – Bob $80,000
Salary – Brenda 120,000
Interest income (from bank account) 150
Interest Income from State of NY bonds 4,000
Capital Loss on the sale of ZeZ, Inc stock (7,220)
Property taxes paid 4,000
State income taxes paid 5,000
Home mortgage interest paid 6,000
Charitable contributions paid 3,000
Federal Withholding 39,000
Tax liability (using rate schedule)
In: Accounting
Brady Construction Company contracted to build an apartment
complex for a price of $6,900,000. Construction began in 2018 and
was completed in 2020. The following is a series of independent
situations, numbered 1 through 6, involving differing costs for the
project. All costs are stated in thousands of dollars.
| Estimated Costs to Complete | ||||||||||||
|
Costs Incurred During Year |
(As of the End of the Year) |
|||||||||||
|
Situation |
2018 |
2019 |
2020 |
2018 |
2019 |
2020 |
||||||
| 1 | 1,690 | 2,700 | 1,470 | 4,170 | 1,470 | — | ||||||
| 2 | 1,690 | 1,470 | 3,160 | 4,170 | 3,160 | — | ||||||
| 3 | 1,690 | 2,700 | 3,120 | 4,170 | 3,020 | — | ||||||
| 4 | 690 | 3,190 | 1,380 | 4,830 | 970 | — | ||||||
| 5 | 690 | 3,190 | 2,630 | 4,830 | 3,020 | — | ||||||
| 6 | 690 | 3,190 | 3,700 | 6,455 | 3,410 | — | ||||||
Required:
Complete the following table. (Do not round intermediate
calculations. Enter answers in dollars. Round your final answers to
the nearest whole dollar. Negative amounts should be indicated by a
minus sign.)
Gross Profit (loss) Recogonized
Revenue Recogonized over time/Revenue Recogonized upon completed for situation 1-6 years 2018, 2019, 2020
In: Accounting
use the data below to explain the current state of the economy. Explain what EACH piece of data illustrates about the economy’s health as well as the OVERALL health of the economy. Use the information from this week's lesson to help you formulate your answer and use those economic terms and concepts.
Economic Data:
According to the Bureau of Labor Statistics the Inflation Rate calculated using the CPI is 0.6% as of June 2020 which is significantly lower than an average of 2.3% in 2019. According to the Federal Reserve, the inflation rate over the past 18 years as measured by the PCE index is as follows:
In: Economics
Martinez Inc. had the following balance sheet at December 31,
2019.
|
MARTINEZ INC. |
||||||
| Cash | $ 25,930 | Accounts payable | $ 35,930 | |||
| Accounts receivable | 27,130 | Bonds payable | 46,930 | |||
| Investments | 32,000 | Common stock | 105,930 | |||
| Plant assets (net) | 86,930 | Retained earnings | 29,130 | |||
| Land | 45,930 | $217,920 | ||||
| $217,920 | ||||||
During 2020, the following occurred.
| 1. | Martinez liquidated its available-for-sale debt investment portfolio at a loss of $10,930. | |
| 2. | A tract of land was purchased for $43,930. | |
| 3. | An additional $30,000 in common stock was issued at par. | |
| 4. | Dividends totaling $15,930 were declared and paid to stockholders. | |
| 5. | Net income for 2020 was $40,930, including $17,930 in depreciation expense. | |
| 6. | Land was purchased through the issuance of $35,930 in additional bonds. | |
| 7. | At December 31, 2020, Cash was $76,130, Accounts Receivable was $47,930, and Accounts Payable was $45,930. |
Prepare a statement of cash flows for the year 2020 for
Martinez. (Show amounts that decrease cash flow with
either a - sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
In: Accounting
During 2020, Monty Furniture Limited purchased a railway carload
of wicker chairs. The manufacturer of the chairs sold them to Monty
for a lump sum of $58,600, because it was discontinuing
manufacturing operations and wanted to dispose of its entire stock.
Three types of chairs are included in the carload. The three types
and the estimated selling price for each are as follows:
| Type | No. of Chairs | Estimated Selling Price per Chair |
||||
| Lounge chairs | 470 | $93 | ||||
| Straight chairs | 640 | 53 | ||||
| Armchairs | 370 | 83 | ||||
Monty estimates that the costs to sell this inventory would be $4
per chair. During 2020, Monty sells 390 lounge chairs, 270
armchairs, and 150 straight chairs, all at the same prices as
estimated. At December 31, 2020, the remaining chairs were put on
sale: the lounge chairs at 25% off the regular price, the armchairs
at 30% off, and the straight chairs at 40% off. All were expected
to be sold at these prices.
What is the total cost of the chairs remaining in inventory at the end of 2020, using the relative sales value method?
In: Accounting
The stockholders' equity account balances of Kay Corporation for 2020 are
given below:
January 1 December 31
Common stock ($12 par, 54,000 shares outstanding) ..... 648,000 720,000
Paid-in capital – common stock ........................ 540,000 594,000
Treasury stock (10,000 share; $16 cost per share) ..... 160,000 36,800
Paid-in capital – treasury stock ...................... 5,000 ?
Retained earnings ..................................... 425,000 ?
During 2020, Kay Corporation entered into the following transactions:
March 23 Re-issued 2,400 of the treasury shares for $13 per share
June 9 Re-issued 3,700 of the treasury shares for $22 per share
August 15 Issued 6,000 shares of previously un-issued common stock
November 2 Re-issued 1,600 of the treasury shares for $14 per share
December 18 Declared and paid a $3.75 dividend per share on the
outstanding shares of common stock
Kay Corporation reported a net income of $293,670 for 2020.
Calculate the balance in the paid-in capital - treasury stock account
at December 31, 2020.In: Accounting